Out of the Gate: Strengthening Your Organization s Sta Point for Managed Care Karen White KSW Healthcare Consulting Auburn, Alabama May 14, 2015
History of Managed Care Roots traced back to the early 1900 s An early form of Health maintenance organizations (HMOs)
History of Managed Care The enactment of the Health Maintenance Organization Act of 1973 (P. L. 93-222 helped expand managed health care. The legislation was proposed by the Nixon Administration in an attempt to restrain the growth of health care costs and also to preempt efforts by congressional Democrats to enact a universal health care plan.
Alphabet Soup HMO: Health maintenance Organization IPA: Independent Practice Association PPO Preferred provider Organization POS Point of Service FFS Fee for Service PPS Prospective Payment System IDS Integrated Delivery System PHO Physician Hospital Organization TQM Total Quality Management HEDIS: Healthcare Effectiveness Data & Information Set RCO Regional Care Organization
Payment methodology Current method Under manage care Under risk based plan
How we get paid right now PPS reimbursement for each encounter with payment every two weeks Medicaid and Medicare; flat rate for each visit no matter what CPT code is used Private insurance: Percentage of charges Self Pay: Small percentage of charges
How will be get paid under managed care Will receive a lower community based rate every two weeks for services Wrap around payments for PPS approximately every four months.
Under a Risk Plan Share the savings Loss could be carried over to the next year
What do you need to do today? PLAN If you fail to plan, you are planning to fail! Benjamin Franklin
Do you track your required HRSA Measures? Total Cost per total patient? HRSA expects this number to be lower than National averages
Medical Cost per Medical Encounter Again HRSA expects this to be less than the National Average? How does your health center compare to state and national averages?
Change in Net Assets to Expense ratio What is your ratio? HRSA uses your audit to complete but it can be calculated monthly/quarterly? Do you know what this ratio means?
Working Capital to Expense Ratio What is your ratio? HRSA uses your audit to complete but it can be calculated monthly/quarterly? Do you know what this ratio means?
Long Term Debt to Equity Ratio What is your ratio? HRSA uses your audit to complete but it can be calculated monthly/quarterly? Do you know what this ratio means?
What do you need to do now? Calculate and trend your days of cash on hand
How much cash do you need? Calculate the cash that you will need to get through the first six months of managed care Details will be provided in the afternoon session
Are you collecting what is owed to you? Calculate and track your days in A/R
A/R can make or break a health center What percentage of charges are being collected? How much is being adjusted off as an allowance? How do you know that all claims are being remitted and paid by third party payors? Claims denial rate by payer source
More reports Charges by provider Net revenue by provider Claims denials by provider Coding levels by provider Appointment experience How many patients are seen each day a provider works? How many hours a day does the provider see patients?
Patient fees When was the last time patient fees were updated? Patient fees are those charges associated with each CPT code How are fees set? Do they cover the cost of operations?
Financial reporting What ratio s and reports are being provided to management and BOD on a monthly basis?
Effective reports Finance committee Reports: Detailed profit and loss compared to budget Balance sheet Cash flow statement
Finance committee Financial ratio such as Days of cash on hand Days in A/R Days in A/P HRSA financial measures (quarterly) Payer Mix Actual Encounters compared to budget Other ratios
BOD Dash board of financial indicators Pick 4-6 of the measures most important to your organization Show trends Format: stop light, indicator arrows, etc.
Federal grant draw downs How much is drawn down each month? Is it 1/12 of the total health center cluster award? Are the total Federal expenses being tracked in the general ledger?
How about the Patient visit Will the patient visit change under manage care?
Yes New enhanced model of care A comprehensive care team to fully embrace PCMH Care coordination Case management
Quality measures Know which measures that are being tracked/incentivized by the third party payor Concentrate on these measures first
Where to start Start small, build as you learn Sort patients by number of medications or number of chronic diseases Pick a high risk population e.g.. patients with more than 4 medications, patients with 3 or more chronic diagnosis
Care model Improve care management by utilizing nurses or social workers to work with patients Patient education Chronic disease management Patient Follow-up
Provider driven changes Care decisions will be made based on statistical analysis What is proven to work for the majority of patients
Improve quality measures The health centers will be paid based on improvements made on quality indicators and by reducing costs..from the manage care organizations perspective
Thank you! Karen White, CPA kwhite4@gmail.com